Payroll and Timekeeping Clerks

Most employers prefer applicants with a high school diploma;
computer skills are very desirable.

Those who have completed a certification program, indicating
that they can handle more complex payroll issues, will have
an advantage in the job market.

Nature of the Work

Payroll and timekeeping clerks perform a vital function: ensuring
that employees are paid on time and that their paychecks are accurate.
If inaccuracies occur, such as monetary errors or incorrect amounts
of vacation time, these workers research and correct the records.
In addition, they may perform various other clerical tasks. Automated
timekeeping systems that allow employees to enter the number of
hours they have worked directly into a computer have eliminated
much of the data entry and review by timekeepers and have elevated
the job of payroll clerk. In offices that have not automated this
function, however, payroll and timekeeping clerks still perform
many of the traditional job functions.

The fundamental task of timekeeping clerks is distributing
and collecting timecards each pay period. These workers review
employee work charts, timesheets, and timecards to ensure that
information is properly recorded and that records have the signatures
of authorizing officials. In companies that bill for the time
spent by staff, such as law or accounting firms, timekeeping clerks
make sure that the hours recorded are charged to the correct job
so that clients can be properly billed. These clerks also review
computer reports listing timecards that cannot be processed because
of errors, and they contact the employee or the employee’s supervisor
to resolve the problem. In addition, timekeeping clerks are responsible
for informing managers and other employees about procedural changes
in payroll policies.

Payroll clerks, also called payroll technicians, screen
timecards for calculating, coding, or other errors. They compute
pay by subtracting allotments, including Federal and State taxes
and contributions to retirement, insurance, and savings plans,
from gross earnings. Increasingly, computers are performing these
calculations and alerting payroll clerks to problems or errors
in the data. In small organizations or for new employees whose
records are not yet entered into a computer system, clerks may
perform the necessary calculations manually. In some small offices,
clerks or other employees in the accounting department process
payroll.

Payroll clerks record changes in employees’ addresses; close
out files when workers retire, resign, or transfer; and advise
employees on income tax withholding and other mandatory deductions.
They also issue and record adjustments to workers’ pay because
of previous errors or retroactive increases. Payroll clerks need
to follow changes in tax and deduction laws, so they are aware
of the most recent revisions. Finally, they prepare and mail earnings
and tax-withholding statements for employees’ use in preparing
income tax returns.

In small offices, payroll and timekeeping duties are likely to
be included in the duties of a general office clerk, a secretary,
or an accounting clerk. However, large organizations employ specialized
payroll and timekeeping clerks to perform these functions. In
offices that have automated timekeeping systems, payroll clerks
perform more analysis of the data, examine trends, and work with
computer systems. They also spend more time answering employees’
questions and processing unique data.

Working Conditions

Payroll and timekeeping clerks usually work in clean, pleasant,
and comfortable office settings. Clerks usually work a standard
35- to 40-hour week; however, longer hours might be necessary
during busy periods. Payroll and timekeeping clerks also may face
stress at times, particularly from the pressure to meet deadlines.

Training, Other Qualifications, and Advancement

Most employers prefer applicants with a high school diploma or
GED. Computer skills are very desirable. Payroll and timekeeping
clerks learn their skills through a combination of on-the-job
experience and informal training. Training also can be attained
through programs in high schools, business schools, and community
colleges. New workers receive training in payroll, timekeeping,
personnel issues, workplace practices, and company policies.

Payroll and timekeeping clerks must be able to interact and communicate
with individuals at all levels of the organization. In addition,
clerks should demonstrate poise, tactfulness, and diplomacy, and
have a high level of interpersonal skills in order to handle sensitive
and confidential situations.

Most organizations specializing in payroll and timekeeping offer
classes intended to enhance the marketable skills of their members.
Some organizations offer certification programs; completion of
a certification program indicates competence and can enhance one’s
advancement opportunities. For example, the American Payroll Association
offers two levels of certification, the Fundamental Payroll Certification
(FPC) and the Certified Payroll Professional (CPP). The FPC is
open to all individuals who wish to demonstrate basic payroll
competency. The more advanced CPP is available those who have
been employed in the practice of payroll for at least 3 years
and who have obtained the FPC within the last 18 months. Both
require experience and a passing score on a comprehensive exam.

Employment

Payroll and timekeeping clerks held about 214,000 jobs in 2004.
They can be found in every industry, but a growing number work
for employment services companies as temporary employees, or for
accounting, tax preparation, bookkeeping, and payroll services
firms, which increasingly are taking on the payroll function as
a service to other companies. Approximately 18 percent of all
payroll and timekeeping clerks worked part time in 2004.

Job Outlook

Employment of payroll and timekeeping clerks is expected to grow
about as fast as average for all occupations through 2014. In
addition to job growth, numerous job openings will arise each
year as payroll and timekeeping clerks leave the labor force or
transfer to other occupations. Those who have completed a certification
program, indicating that they can handle more complex payroll
issues, will have an advantage in the job market.

As entering and recording payroll and timekeeping information
becomes more simplified, the job itself is becoming more complex,
with companies now offering a greater variety of pension, 401(k),
and other investment plans to their employees. Also, the growing
use of garnishment of wages for child support is adding to the
complexity. These developments will fuel the demand for payroll
and timekeeping clerks, who will be needed to record and monitor
such information.

Firms increasingly are outsourcing the payroll function. As a
result, the best employment opportunities are expected to be in
companies that specialize in payroll, including companies in the
employment services industry and the accounting, tax preparation,
bookkeeping, and payroll services industry. Many of these companies
are data processing facilities, but accounting firms also are
taking on the payroll function to supplement their accounting
work.

The increasing use of computers will limit employment growth
of payroll and timekeeping clerks. For example, automated time
clocks, which calculate employee hours, allow large organizations
to centralize their timekeeping duties in one location. At individual
sites, employee hours increasingly are tracked by computer and
verified by managers. This information is compiled and sent to
a central office to be processed by payroll clerks. In addition,
the growing use of direct deposit will reduce the need to draft
paychecks, because these funds are transferred automatically each
pay period. Also, more organizations are allowing employees to
update their payroll records electronically. In smaller organizations,
payroll and timekeeping duties are being assigned to secretaries,
general office clerks, or accounting clerks. Furthermore, the
greater complexity of the job, coupled with the automation of
records that is simplifying data entry, is resulting in payroll
professionals, not payroll and timekeeping clerks, doing more
of the work.

Earnings

Salaries of payroll and timekeeping clerks may vary considerably.
The region of the country, size of city, and type and size of
establishment all influence salary levels. Also, the level of
expertise required and the complexity and uniqueness of a clerk’s
responsibilities may affect earnings.

Median annual earnings of payroll and timekeeping clerks in May
2004 were $30,350. The middle 50 percent earned between $24,430
and $36,930. The lowest 10 percent earned less than $19,680, and
the highest 10 percent earned more than $44,270. Median annual
earnings in the industries employing the largest numbers of payroll
and timekeeping clerks in May 2004 were:

Management of companies and enterprises

$32,600

Elementary and secondary schools

32,390

Local government

31,620

Accounting, tax preparation, bookkeeping,
and payroll services

29,040

Employment services

28,010

Some employers offer educational assistance to payroll and timekeeping
clerks.

Related Occupations

Payroll and timekeeping clerks perform a vital financial function—ensuring
that employees are paid on time and that their paychecks are accurate.
In addition, they may perform various other office and administrative
support duties. Other financial clerks include bill and account
collectors; billing and posting clerks and machine operators;
bookkeeping, accounting, and auditing clerks; gaming cage workers;
procurement clerks; and tellers.

Sources of Additional Information

For general information about payroll and timekeeping clerks,
contact: